U.S. Subprime CDS Recover from Maiden Lane

U.S. subprime credit default swap prices recovered in July after being adversely affected in June by the so-called Maiden Lane auctions and the problem looks unlikely to recur, according to Fitch Solutions’ index.

Like what you see? Click here to sign up for a National Mortgage News free trial and daily newsletter to get the latest feature stories, news headlines, data, and in-depth analysis on the issues impacting the mortgage industry.

“Increased uncertainty in the broader markets is likely to keep Maiden Lane on the backburner,” Alexander Reyngold, senior director, Fitch Solutions, told this publication.

“Though Maiden Lane will stay in the market’s memory, it will not play an active role until subprime CDS prices reach new highs,” David Austerweil, director, Fitch Solutions, told this publication.

Fitch said U.S. subprime CDS prices recovered most of last month’s losses, increasing 1% overall.

Both 2006 and 2007 saw their largest price increases this year during the period, with the former being particularly notable because the vintage has significantly underperformed its peers in the past, Reyngold noted.

Loan performance during the month was mixed, according to the Fitch Solutions report. Ninety-day-plus delinquency rates dropped by 1.4% to a low for the year of 10.8%, but the one-month constant default rate increased substantially by 13.5%.

At one point during the Fed’s Maiden Lane auctions of subprime RMBS earlier this year the market reached a point where it could not absorb the supply and prices took a hit as a result.

Daily Briefing | Monday, August 15, 2011

  • More Americans Pessimistic About Housing Recovery

    More homeowners say they are under water on their mortgage and more Americans are pessimistic about house prices, according to a quarterly consumer survey by Fannie Mae.

  • MBA Seeks Approval for ‘Transitional’ LO License

    The Mortgage Bankers Association is seeking relief from the dual tracking system under the Secure and Fair Enforcement for Mortgage Licensing Act that sets different qualification requirements for loan originators, depending on where they are employed.

  • Advocate Favors 20% Down QRM

    When it comes to qualified residential mortgages, industry and consumer groups like to say they are united, arguing that too strict a QRM definition will result in disqualifying many otherwise creditworthy borrowers. But not everyone is of that mindset.

  • Section 8 Units Saved by $59.5M Immediate Bond Financing

    Oak Grove Capital has originated a $59.5 million Fannie Mae bond credit enhancement loan for the acquisition and renovation of 694 affordable housing units on the Southside of Chicago.

  • CU Hurt by Housing to Merge

    The CEO of Synergy One Federal Credit Union, whose branches are located in Prince William County, Va., said the institution’s pending acquisition by Apple Federal Credit Union, Fairfax, Va., is being caused by how the economy is affecting the area’s housing market.

  • Experian: Mortgage Delinquencies Higher Despite Improvements in Credit Card Payments

    Even though more nationwide consumers are paying their credit card payments on time, mortgage delinquencies of 60-days or more have increased since 2007, according to an Experian report.

  • FHA Won’t Exempt Small Banks from Compliance Audit

    Small community banks will have to pay for a compliance audit if they want to continue to originate FHA-insured single-family loans, according to the Department of Housing and Development.

  • Moody’s: Cumulative Defaults on Spanish RMBS Rise

    Moody’s Investors Service’s index of cumulative defaults for Spanish residential mortgage-backed securities rose to 1.98% of the original balance in June compared to 1.89% in March.

  • Global Uncertainties Could Affect Mexican RMBS

    Standard Poor’s Mexican RMBS index suggests improvement could be relatively slow for the remainder of the year due to global economic concerns.

  • HomeSteps Provides Condominium Buyers with Limited Time Offer

    HomeSteps, the real estate sales unit of Freddie Mac, is now offering a special limited time offer of $1,500 to help condominium buyers pay for future associates dues.

Article source: http://www.nationalmortgagenews.com/dailybriefing/2010_410/subprime-cds-recover-from-maiden-lane-1026127-1.html

Leave a Reply

WP Facebook Auto Publish Powered By : XYZScripts.com
Bunk Beds